Archive for June, 2006

MoCo news did a summary of some recent MVNO news driven from a recent WSJ article. The carriers have known all along what the WSJ is reporting. Statistically, zero percent of consumers choose a wireless carrier based on entertainment and/or media options. Most consumers choose based on quality of coverage and price – handset and minutes. That said, companies can still be profitable in niche markets. With more than 200 million subscribers in the US, less than one percent market share could still be more than one million subscribers. Many wireless service providers are profitable with this few subscribers.

I’m not sure if anyone has written any best practices about when “text to vote” campaigns should be run or when they should appear on TV screens. I’m not a media expert, but covering the entire TV screen with a “text to vote” menu during a “live” World Cup Soccer game? Are you crazy? There are already banners across the top of the screen (ok, knowing the score and clock time is good) and the bottom (ok, maybe good to know that Ben (Pittsburgh QB) is out of the hospital after crashing his motorcycle), but please … give us the middle two-thirds of the screen without any ads during the “live” match. How about a banner at the bottom of the screen during the halftime chatter when there is just a talking head? and not Beckham launching one of his famous crosses?

Messaging / voting campaigns should be giving viewers reasons to watch a broadcast “live” – not a reason to switch over to your competition’s broadcast – even if the competition is broadcasting in Spanish.

Voting/messaging campaigns should be creating interest in using the data services on the phone. I mostly felt like throwing my phone at my TV when the picture was being blocked.

Verizon Wireless launched their new kid-tracking service this morning. See press release. Handsets are limited, but the Migo is a good starting point. Service is pricey at a combined nearly $20 per month for all of the offerings, but Chaperone (as they’ve named the service) is the “Cadillac” of kid-tracking services and a great response to Disney’s product announcements earlier this year. It really offers everything a parent could want that is economically feasible with today’s technology. Our data show that parents buy cell phones for their children in cases of emergencies and for value (i.e., doesn’t cost much to add them to family plans) so Verizon will have a bit of a tight rope to walk managing these two priorities.

Other questions I have:

Why does it always have to be a phone that is expensive and needs to be charged and has to be shut off during class? We’ve seen watches, wristbands, etc. announced before, but not really rolled out by carriers.

What about the kids who want to know where their parents are? My friends with their seven-year old bought the Migo for their kid’s peace of mind – not their own. See earlier blog.

Sacramento is the latest city seeking a free municipal Wi-Fi network whose project has stalled. See this report. SacBee also had a number of write-ups. Google said “no” to this Silicon Valley project (see SF Chronicle story) earlier this year.

I think that we will continue to see more stories like this now that the Municipal Wi-Fi effort is underway. The “window of opportunity” for free or subsidized networks is, for the most part, closed. Moreover, cities thinking that others are getting free networks haven’t read the fine print in the deals. Here are a few comments/reasons why companies are saying “no” to building networks:

- All public or municipal Wi-Fi networks will require a collection of revenue streams to cover costs or even to generate profits. (JupiterResearch quantified this in a report a few years ago.) The cost of obtaining the revenue can also not be out of control – hence the need for cities to be anchor tenants. A collection of revenue streams is required, but it can’t be hundreds of pieces.

- Most young companies and businesses invest in their first few deals. New businesses need to trial their technology and business models. They often help fund early projects or work with charter customers in partnership to develop their technology. Half Moon Bay – one of Tropos’ first deployments probably didn’t pay a lot if anything for the network. However, Tropos is the technology now being deployed in lots of Muni deployments – they don’t have to build networks for free anymore. I’m sure Earthlink (though I don’t know the details) was more flexible in their negotiations with Philadelphia and San Francisco than they will have to be going forward. They have their test beds for the technology/network. Intel also chose a dozen cities initially to assist. They also just need a few to get things going – generate awareness, see how it works, etc.

- Expecting that ad revenue alone is going to fund these networks is unrealistic in the near term. There are some scenarios like malls where there is a captive customer (advertiser) base, and a simple, low cost deployment is all that is needed to provide coverage to a handful of shoppers surfing the Internet. However, funding a citywide network is difficult. Even Google isn’t doing that in SF – they are paying Earthlink some money that will cover a portion of Earthlink’s costs, but certainly not all. Moreover, Google has an existing sales structure and business model for selling search/ads. Business models built on online local ads can be hard for a lot of reasons – consumer adoption, amount of inventory, local advertisers don’t care about clicks, education of small business owners, etc. It will take time for this market to evolve and it’s unlikely to support a network alone any time soon. Moreover, Google doesn’t have to be trialing this in 100 markets nationwide to learn about the market and see how it goes.

Municipal Wi-Fi is definitely a market where early movers (e.g., SF, Philadelphia) gained some advantages. That said, they will also be projects where the vendors and service providers are learning – it’s not necessarily going to be that smooth. Later adopters will benefit from the learnings gained in these early deployments. These benefits may outweigh the added costs of building out the network.

The newspapers have been full of articles about the World Cup driving commercial launch dates for broadcast mobile video around the world. This article claims more than 100 countries have mobile video offers in place for the Cup.

I checked out the offerings on Verizon. Vcast plus Glu’s Fox Sports application together provide in-depth information on the matches. I thought soccer on a small screen would be awful. I was surprised – it was really well done on the Vcast service. Great close-up’s of the highlights (e.g., cards, set pieces, goals, etc.). It presents enough information that you can follow the match.

Yeah, it was only in Spanish, but you don’t need the commentary to know what’s going on. Besides, during the broadcasts I used Tivo in reverse – I fast-forwarded past the English commentary and slowed down to watch the commercials. The commercials put on by Adidas and Nike and Apple are more entertaining than Brent Musberger.

Only complaint … they only had one day’s matches available. I would love to be able to flip back through highlights of the entire tournament.

Will be interesting to see to what extent the World Cup drives upgrades of handsets and adoption of video subscriptions. Most fans I know have upgraded their TV to some HD/widescreen/flatscreen combination. Others have upgraded DVR/Tivo hard drives or added Slingboxes so they can watch at work. At a minimum, it’s raising awareness which is a good thing right now.